One cheap oil stock to buy now

As oil gets scarcer, it becomes more difficult to extract. And so the companies making the complex tools to reach it should prosper. Chris Mayer tips one company that's going cheap, and has a bright future ahead of it.

Tesco Corp. (Nasdaq: TESO) looks like a very cheap stock to me. This oilfield services company is not merely cheap in relation to its long-term growth prospects, but it is also VERY cheap in relation to recent takeover prices in the sector.

Last summer, Cameron Intl. announced it would acquire Natco Group for $780 million, or about nine times trailing EBITDA. (EBITDA stands for earnings before interest, taxes, depreciation and amortization. It's a good rough measure of earnings power to use when comparing firms across a sector.)

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